OYO out shopping with $250 million in hand

The company has till date made about six acqui-hires since 2016, none of which have been publicly announced. Most of the transactions were done to acquire the teams of the acquired ventures and were stock deals with a small cash component.

According to Agarwal, the company will use a significant portion of the $250 million it has raised from a clutch of global investors, at a valuation of about $850-900 million, to finance the acquisitions.

NEW DELHI: OYO will scout for more acquisitions in the upcoming fiscal, as the online budget hotels aggregator stitches together a more aggressive buyout strategy, buoyed by a $250-million war chest.

The company has till date made about six acqui-hires since 2016, none of which have been publicly announced. Most of the transactions were done to acquire the teams of the acquired ventures and were stock deals with a small cash component.

In late 2015, it had also entered into negotiations to acquire smaller rival Zo Rooms, but in October last year terminated the negotiations stating that it had failed to identify any “potential value” in the latter’s business.

The two companies have been trading barbs and have filed complaints against each other in courts, since the beginning of the current calendar year.

However, the company will now look for buyout opportunities in India, its primary market, and may also look for similar targets overseas, given its rapid expansion plans.

OYO has already established its footprints in Malaysia and Bhutan and is believed to be exploring the lucrative Chinese market as well. “From our perspective, it (prospective acquisitions) can range from hotel companies to internet-of-things-based technologies. We are going to be more engaged going forward…It can be this entire circle of competencies that these acquisitions can have for us,” Ritesh Agarwal, CEO of OYO told ET.

According to the CEO, OYO will also look at mature bootstrapped companies, regardless of their revenue, and is currently in negotiations with a few.

He, however, declined to share details of the companies OYO is currently in talks with, but said that the company’s corporate development team, headed by Maninder Gulati, chief strategy officer, is leading the discussions.

“Those are also companies that have built very strong businesses, and should consider OYO as a good fit, (and with whom) it can partner with and continue to run the business as entrepreneurs, get the capital and technology support from us, and keep building it over time,” Agarwal said.

The statements come a little over a month since OYO completed its latest acqui-hire – DoneThing that was backed by Brand Capital, the investment arm of Bennett, Coleman and Co, which publishes The Economic Times.

According to Agarwal, the company will use a significant portion of the $250 million it has raised from a clutch of global investors, at a valuation of about $850-900 million, to finance the acquisitions.

“Wherever we see someone who can add to our stack, and make OYO more valuable to our asset owners, or customers, we will be interested, in India or outside-…We will definitely look at companies in international markets, but for the core capabilities they have created, and not just for market share,” Agarwal said.